Morning briefing: The EUR/USD can head towards 1.1700-1.1800

Vikram Murarka Kshitij Consultancy Services

The Dollar Index can extend the fall towards 98 or even 97 while it trades below 99. The EURUSD & EURINR can head towards 1.17-1.18 & 106 respectively in the near term. EURJPY can trade within 180-182 region, while USDJPY can initially test 154-153 before rebounding. USDCNY has support at 7.06 and while it holds a bounce back towards 7.08-7.10 can happen. The Aussie is hovering near the resistance coming at 0.665. Need to see whether the resistance holds or the rise extends further. Pound has as scope to rise towards 1.34-1.35 while it trades above 1.3250. USDINR can attempt to rise towards 90.50-91.00 as long as it trades above 89.50.

The US Treasury yields are moving up as expected and are coming close to their resistance zone. The price action this week is going to be important. We have to see if the yields are making a bullish breakout above their resistance or not. The German yields have risen further. They keep the bullish view intact and can rise more in the coming days. The 10Yr GoI failed to sustain the downside breakout of its range. For now, the sideways range remains intact. It can rise within the range if it manages to sustain above the range support.

Global equities remain broadly firm, with the Dow holding its bullish setup for 49000 and the DAX pushing higher toward 24500 and potentially 24800. Nifty continues to climb and can test 26300-26350 while 25800-26350 acts as the broader range for now. Nikkei trades above 50000 but needs a break past 51000 to target 52000, otherwise it may stay sideways between 51000-48000. Shanghai has bounced above 3900 yet still faces resistance near 3950, keeping it in a 3950-3800 consolidation zone for the time being.

Brent and WTI have inched up but are likely to stay range-bound within $64-62 and $60-58 for now. Gold remains steady above $4200 and can rise towards $4400 while support near $4100 holds. Silver stays weak below $60 with room to fall towards $56 before any recovery. Copper has risen to $5.49 and can extend towards $5.60-5.65. Natural needs a break above $5.50 for a move towards $6.0-7.0 or else it risks slipping to $5.0-4.5.

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Author

Vikram Murarka

Kshitij Consultancy Services

Vikram has been forecasting, trading and hedging currencies since 1991. Beginning his career as a currency trader in Essar Group, he was managing an FX exposure of $1.2 bln.

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